Rosenberg predicts that the digital coins of the central banks (CBDC) will take the market of the cryptomains.
Rosenberg Research founder and chief economist David Rosenberg believes that Bitcoin is in a „massive bubble“. He said that a new negative market similar to what happened after Bitcoin’s rise in 2017 could be repeated this year.
The economist explained that Immediate Edge performed similarly to the current one during the last high in 2017. However, he said, once the bubble burst, the cryptomime entered a bearish market that caused the currency to drop by more than 80%.
„Bitcoin is in its largest bubble, which could lead to a prolonged bearish market, similar to that of 2018,“ said the former Merrill Lynch economist.
He believes that the current Bitcoin rally in a short period of time is „highly abnormal.
Rosenberg is the chief economist and strategist at Rosenberg Research & Associates, an economic consulting firm he founded in January 2020. He holds a Master’s degree in Economics from the University of Toronto.
Rosenberg was once Gluskin Sheff’s chief economist and strategist and chief economist at Bank of America in New York and before that he was senior economist at Bank of Nova Scotia.
In an interview with CNBC, the renowned economist said he is avoiding betting on bitcoin, especially after his recent record appreciation that saw the currency reach $34,000.
In the interview he criticized the maximum supply of 21 million currencies that already exists, saying that when the asset reaches this limit, the protocol „can be changed to produce more currencies.
„It probably won’t burst anytime soon.
Rosenberg told CNBC that the bubble will not burst any time soon, he said that traditional stock markets are also in a bubble. His research company said the stocks are around 30% „overvalued“.
„What is holding the boot is basically zero interest rates. As long as the rates stay where they are, unless we have a real dramatic downturn in economic activity, this bubble we’re in is probably not going to burst anytime soon,“ he said.
Rosenberg is not the only economist who makes warnings about the price of Bitcoin at the end of last year, Michael Burry – the famous investor played by Christian Bale in the movie „The Big Bet“ – compared Tesla to Bitcoin, calling them both a bubble.
Although several other economists think Bitcoin is overbought, the overall trajectory of digital currency remains optimistic, with several other analysts believing that digital currency will reach at least US$ 100,000 by 2021.
Only time will tell who was right.